Keeping Up With The Joneses

Gaming MarketInsights LOTTERY, GAMING,

MARKET TRENDS & INSIGHT

2 Gambling on the Internet

4 Taking the EGM fight to the Feds

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6 Market Insight: A case for Internet gambling in Ontario

8 Internet offers many markets, opportunities: payment firms

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10 A different kind of ‘green’

12 New rules: The OLG ups security measures.

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Gambling on the Internet

INsIdE ThIs IssuE

dOwNLOAd ThIs ANd ALL IssuEs AT: gamingmarketinsights.com/

In the face of stagnant revenues and significant

competition from offshore online gambling houses,

Canada’s provincial lottery corporations may want

to start exploring new venues for gambling, namely

the Internet and mobile devices.

A recent study conducted by decima Research reveals that Canadians are showing a growing acceptance level for wager-ing on lotteries, casino-type games, and sports online or via a

wireless handset. For instance, more than one-quarter of Cana-dians think playing interactive, online lottery games for money is an acceptable form of gaming, with males between 18 and 35 years old showing the highest level of acceptance. Poker, however, is a different story as Canadians are more reluctant to embrace the prospect of playing it online for money in spite of its recent popularity on television. The lottery corporations in British Columbia and Atlantic Canada have already ventured into online lotteries, possibly setting an example for other prov-inces to follow.

CONTINuEd »

March 2007 Issue 1

Gaming MarketInsights LOTTERY, GAMING,

MARKET TRENDS & INSIGHT

Editor

Kurt Eby [email protected] ConsultingEditor

Richard Leigh-Bennett [email protected]

ManagErsubsCribErsErviCEs

Ryan O’Neill [email protected]

dEsign&artdirECtion

Adrian Jean [email protected]

ContaCtus

Phone: (613) 230-2200Fax: (613) 230-3793Mail: 160 Elgin street, suite 1800 Ottawa, Ontario K2P 2P7

IssN 1911-8228

Gaming Market Insights is published by:

gamingmarketinsights.com/

Copyright © 2007 by decima Research Inc. All rights

reserved. Reproduction in any form whatsoever is

strictly prohibited. The information in this publication

has been obtained from sources we believe to be

reliable, but neither completeness nor accuracy

can be guaranteed. Opinions expressed are based

on interpretation of available information, and are

subject to change. If expert advice on the subject

matter is required, the services of a competent

professional should be obtained.

Gambling on the InternetLegal gambling in Canada is now a $14-billion

industry, up from about half

that amount just 10 years ago.

The rapid expansion of casinos

and electronic gaming devices

(EGds) has fuelled this growth.

while casino-type gambling

revenue has increased, revenue

from traditional lottery games

reached a plateau – and, in some

cases declined – during the past

decade. This worries many of

the corporations running lotter-

ies across Canada.

with declining lottery revenues, casino moratoriums, and numerous studies pointing to the high social costs of EGds, provincial governments are look-ing for new ways to generate revenue growth, and one option is the Internet.

Online gambling is now seen as real competition for regulated gaming; off-shore competitors are not subject to the same regulations that the lottery corpo-rations are, and thus much if not all of the revenues flow to the private sector or out of the provinces.

Canada’s first foray into online lotteries comes from British Columbia (BCLC) and Atlantic Canada (ALC). This regulat-ed initiative is a first step in combating the unregulated gaming that is on the horizon for Canadians.

A recent study conducted by decima Research shows that there is a growing acceptance level for placing wagers on casino-type games and sporting events and for purchasing lottery tickets on Internet sites via a home computer or through a mobile or wireless device.

In fact, slightly more than one-quarter of Canadians think playing interactive lottery games for money on an Internet site is an acceptable form of gaming.

Decima 2007 National Gambling Report:Acceptability of New Forms of Gambling - Canada

Playing Poker for money on the Internet

Playing casino type games for money through an in-home interactive TV channel

Playing casino type games for money in-flight or during train travel

Playing interactive lottery games for money on an Internet site

Purchasing lottery tickets through a mobile phone or wireless device

Playing casino type games for money through a mobile phone or wireless device

Betting on sports through an online wagering site

32%

30%

26%

26%

26%

21%

17%

Percent agreeing that these activities are acceptable forms of gambling

Page �

gaMIng Market InsIghts — March 2007

Our research indicates that males,more so than females, and close to half of those between 18 years and 35 years of age, agree these activities are accept-able. Even more surprising, one-quar-ter of Canadians also think purchasing lottery tickets through a mobile phone or wireless device is acceptable. Again, more often males and those under age 35 years agree that this kind of gaming is acceptable.

Playing casino-type games on a wire-less device is considered acceptable by close to one-third of all Canadians with the exception of those living in Quebec. Quebecers are half as likely as the rest of Canada to think this type of gaming is acceptable. They also tend to be the least likely to think venturing outside the gaming norm and into the Internet and wireless world is acceptable. while lottery spending per capita in Quebec is among the highest in Canada, the province also has the lowest penetration rates for Internet and wireless services.

while the boom in poker on the Internet and television has continued, this has not translated into a large acceptance among Canadians for playing poker for money on the Internet. Fewer than two in 10 feel this is an acceptable activ-ity. Indeed, placing wagers on sporting events through an online wagering site was considered acceptable by more Canadians than was playing poker for money on the Internet.

what this reveals is that players, espe-cially younger ones, prefer games that offer more than just the winning expe-rience that lotteries provide. They are looking for more of a play experience that involves challenge, entertainment, escape, and emotional involvement.

while some provinces (BCLC and ALC) have jumped on the Internet band-wagon, others have been more reluc-tant because of government priorities or the pending backlash from problem gambling groups and those opposed to expanding gaming across Canada. The high appeal of Internet gambling to problem gamblers is also a concern for those regulating gambling activities in Canada.

Governments, especially those in Atlan-tic Canada, Quebec and the Prairies, will have to tread lightly in these areas as current sentiments towards gambling expansion are closely related to how Canadians feel about the government’s performance in regulating gambling and the perceived seriousness of gambling addiction in their province. however, pressure to provide regulated Internet gambling and to capture revenue that currently flows to the private sector or out of the country may lead the govern-ment to finally gamble on the Internet.GMI

The DecIma NaTIoNal GamblING RepoRT

The decima National Gambling Report is

a unique syndicated consumer research

study that explores behaviour and at-

titudes towards the issues that surround

policy decisions related to gambling. This

comprehensive report is designed to assist

in determining emerging issues and trends

to give a full picture of gambling in Canada.

Results from this study monitor changes

in the gaming marketplace. This includes

attitudes towards current gambling venues,

as well as the acceptability of new emerg-

ing forms of gambling.

The study involves surveying 3,500 Cana-

dians during January of each year. The data

is weighted by gender and age distributions

to reflect the Canadian population.

Moreat:decima.com

Decima 2007 National Gambling Report:Acceptability of New Forms of Gambling - Gender Differences







Betting on sports through an online wagering site39%

36%

32%

30%

32%

25%

21%

26%

24%

21%

22%

21%

16%

12%

FemaleMale


Decima 2007 National Gambling Report:Acceptability of New Forms of Gambling - Age Differences







Betting on sports through an online wagering site

52%

50%

40%

42%

38%

31%

28%

31%

28%

25%

24%

26%

21%

15%

15%

12%

14%

13%

14%

10%

8%

55 plus35-5418-34



Page �

Watchdogs take new approach in fight against

egMsBy: KuRT EBy

disillusioned with the relative lack of success in lobbying

provincial governments and gam-

ing commissions to address the

addictiveness of video lottery ter-

minals (VLTs), a group of citizens

from across Canada has launched

a complaint with the Competition

Bureau alleging that electronic

gambling machines (EGMs) are

deceptive and contravene both

the Criminal Code of Canada and

the Competition Act.

This is a fresh strategy on the problem gaming front in that it’s aimed at federal authorities and relies on quantitative scientific arguments. Nevertheless, the complainants say they are realistic about what it could achieve. “My intent is not to try to take down the industry or outlaw the machines, but to try and force some change, especially in regula-tions to bring machines up to the same standards for game fairness and hones-ty as table games,” says Roger horbay, president of Game Planit Interactive Corp. and gaming technology advisor to Canada’s Gambling watch Network.

horbay co-authored the complaint with Australian lawyer and one-time com-mercial/legal officer for the Victorian Casino Control Authority Tim Falkiner. It focuses mainly on virtual reel mapping, which through computer chip technol-ogy allows EGM manufacturers to in-

crease the number of possible stops on a machine, increase prize amounts and increase profits to operators. horbay and Falkiner question the actual ran-domness of machines that have a fixed payback rate, as well as investigate-claims that virtual reel mapping gener-ates near-misses that help contribute to the addictive nature of EGMs. “These near-miss effects are designed to give players the impression that they almost won or are getting closer to winning,” reads the complaint. “These are false or misleading representations because each play is really a random event with a clear win-or-lose outcome.”

Virtual reel mapping contravenes sec-tion 74.01 of the Competition Act by making a false or misleading represen-tation to the public as part of a business interest, according to the complaint. horbay would like to see Canadian EGM standards covering VLTs and video slot machines in casinos at least be brought into line with those in Australia and New Zealand, where virtual reel mapping has banned. he’s particularly hopeful about this new approach because he feels the laws of the Competition Act supersede Canada’s current EGM regulations.

Peter Czegledy, a partner at Toronto-based Aird & Berlis LLP and member of the International Association of Gaming Attorneys, says this type of complaint is distinct from lobbying since it necessitates a certain level of engagement by the government, including some form of investigation and resource commitment. That said, results of any kind are not guaranteed. “I don’t have a lot of confidence in

Page �


Watchdogs take new approach in fight against

egMsthe likelihood of success of the com-plaint, at least in terms of it resulting in a judicial or competition tribunal order that would alter the applicable gaming laws and related regulatory processes,” says Czegledy in an email to GMI. “I do, however, appreciate that it may achieve other goals, such as at-tracting publicity or causing discomfort for certain authorities.”

while not an absolute win, Brian yeal-land, spokesperson for the Gambling watch Network and one of eight people who signed the complaint, would see increased media exposure and public pressure as a victory. “The industry is gambling that the public will stay benign and not become outraged,” he says. “That’s their gamble, and the pub-lic’s gamble is trust.” yealland describes the progress of his fight against VLTs as “one baby step forward, 20 giant steps backwards,” but points to the Ontario Lottery and Gaming Corp.’s decision to overhaul its customer security practices following a report on CBC’s Fifth Estate about a retailer stealing a winning lot-tery ticket as an example of what media attention can accomplish.

But VLT addiction research has brought on other victories as well. In its 2004-2007 development Plan, Loto-Québec announced it was reducing the number of VLT sites – mostly bars and taverns – by 31%, or from 3,600 to 2,500. The development plan admits that “the rate of compulsive gambling among VLT players is indeed higher than among individuals playing any other games,” and Loto-Québec spokesperson Jean-Pierre Roy says the main reason behind

the reduction was research showing that increased accessibility to VLTs ex-acerbates problem gaming. “you need to draw the line between having a suf-ficient number of machines and having too many sites or machines,” he says. “That’s a tough exercise, but we’re try-ing to do it the best way we can.”

As a former VLT addict and current spokesperson for Nova scotia’s Game Over VLTs, debbie Langille isn’t satis-fied with a mere reduction in sites or machines and doesn’t believe provin-cial governments are doing enough to protect their constituents. Langille’s ultimate goal is total elimination of VLTs, but she signed the complaint hoping that the deceptive nature of the machines would at least be addressed. she adds that she doesn’t want the ad-dictiveness of VLTs to be lost in what is a technological complaint, although it would seem that the two are related.

horbay says he stumbled across an un-derstanding of how EGMs work a de-cade ago while treating gamblers as an addiction therapist. he was surprised that hundreds of gambling addicts were all displaying the same faulty cognitions about EGMs. After studying the machines he concluded that his patients were actually processing the information correctly, but were getting false impressions from the games.

EGM testing in Canada varies from ju-risdiction to jurisdiction. Loto-Québec, for instance, has its machines tested by its regulating body, the Régie des al-cools, des courses et des jeux. horbay adds that while some provinces have

their own testing labs, others contract the task to private testing companies, and for the most part the machines are tested to comply with Nevada stan-dards. But horbay isn’t insinuating that Canada’s gaming commissions know-ingly addict gamblers through these games, but rather that the standards they are using are not protecting the best interests of Canadians.

whether the federal regulators comes to the same conclusion remains to be seen – the Competition Bureau could only acknowledge it received the com-plaint and couldn’t comment on any investigation. however, Czegledy says that even if the Competition Bureau finds cause for action, it won’t neces-sarily be a win for the complainants. “In such an eventuality there is no cer-tainty, and I think in fact that it would be highly unlikely, that the commissioner would make an application to a court or the competition tribunal compelling provincial regulators to adhere to a new set of standards for [EGMs],” he says. “Other remedies would be avail-able and more likely consequences.”

If that’s the result, horbay and all those who signed the complaint might have a hard time accepting it. “I can’t see why they wouldn’t want to bring the standards up to date; they’re archaic,” horbay says. “you don’t allow loaded dice, you don’t allow stacked decks, why would you allow similar features in an electronic gaming machine?” GMI

Page �

with the recent news coming from Ontario

about a dishonest lottery clerk

misappropriating a winning

ticket from its rightful owner,

the time is right for the OLG to

consider moving ahead with

the times and embrace Internet

technology.

By allowing the consumer the choice of purchasing lottery products on the Internet – as is the case with the ALC, Lotto-Quebec and the BCLC – dishonest lottery retailers can, to some extent, be removed from the ticket purchase and validation procedure.

while the aforementioned move would not address all the issues the OLG is facing, it is definitely a step in the right direction and allows players the option of participating in the provincial lottery scheme from the comfort and security of their own home using the Internet – a service that is now almost ubiquitous in Canadian households.

One should note that the media has blown the issue of fraud out of propor-

tion and that the OLG has done an ex-cellent job of conducting our provincial lotteries. Rampant fraud is not occur-ring and the incidents are few and far between. Notwithstanding this, creat-ing an atmosphere where the ability to abuse is reduced substantially can only improve an already outstanding organi-zation and system.

having this in mind, the history of Inter-net gambling in Canada is an interesting one, to say the least. The first serious attempt to regulate Canadian Internet gambling occurred in 1996 at the federal level. dennis Mills, an MP from Toronto, introduced a private member’s bill that never really went anywhere. Absent egregious circumstances, such as that of the 1999 starnet prosecution, neither federal nor provincial authorities have shown much interest in prosecuting or taking other legal action against online gaming operators (except for horserac-ing) as long as the operators have a minimal connection to Canada.

The scale of Internet gambling rev-enues has alarmed Canadian land based casinos. In April 2006, the CEO of the Canadian Gaming Association, Bill Rutsey, claimed in Interactive Gaming News that Internet gambling sucked $500 million per annum out of Canada at the expense of land-based casinos: “Millions (of dollars) just disappear; the money is sucked right out of the economy, Internet gaming is a real competitive threat, and law enforcement needs to take steps to deal with the issue. It seems to be a case of benign neglect at this point.”

Internet gaming, however, clearly exists in Canada. The First Nation of Kahn-

Market InsIght:

keeping up with the Joneses a case for Internet gambling in ontario By: ALEx IGELMAN

Page 7


awake in Quebec and the Alberta First Nations established gaming regulatory bodies in 1999 and 2006, respectively. The Kahnawake granted an Internet gaming license to Mohawk Internet Tech-nologies, which subsequently granted client provider authorizations to more than 100 gaming licensees. It is undis-puted that the regulation ensures the suitability and solvency of licensees. Both the federal and Quebec authorities have an ambivalent attitude towards the legality of the Kahnawake gaming but a strong constitutional argument has been made as to its legality by Quebec lawyer Morden C. Lazurus (et al) in a recent Gaming Law Review article.

some, such as Cheryl Giblon of E Nation Corp., have suggested that it is unclear whether the Criminal Code of Canada covers Internet gambling. Others, such as Michael Lipton, Q.C., have suggested that the Criminal Code does prohibit In-ternet gambling but that “the problem lies in a general passivity toward regu-lating online gambling.”

If Internet gambling is to be regulated, there is consensus that the regulation must take place at the provincial/ter-ritorial level. It was recently reported that Alberta was seriously considering regulation of Internet gambling, but this was later shown not to be the case. Quebec was also interested enough in the subject matter to send a represen-tative to an international interactive gaming regulatory conference hosted by the British government in Novem-ber 2006.

One of the few Canadian cases involv-ing Internet gambling involved a pro-posed lottery based in PEI. On February

8, 2000 pursuant to s. 207(1)(b) of the Criminal Code, the Government of PEI granted the Earth Fund a license to conduct the Earth Future Lottery. The Earth Fund intended to sell tickets though the Internet and this caught the attention of the other provincial lottery corporations since the Earth Fund was not limiting their target audience to PEI. In April 2002, PEI’s highest court that an interprovincial interactive lottery might be in violation of the federal Criminal Code and the decision was affirmed by the supreme Court of Canada.

Interestingly enough, since 2004 the ALC has operated Playshare, where adults from Atlantic Canada may pur-chase lottery and sports game tickets by the Internet.

Most Canadian provincial lottery opera-tors are in the unique position of having monopolies on all forms of gaming in their respective jurisdictions. Launch-ing any form of Internet gambling for the public would be extremely easy for the provincial operator as they would just be adding a new distribution chan-nel to their existing roster. A portion of monies generated from this new channel could be directed to problem gambling initiatives.

It’s about time the OLG caught up with some of its provincial counterparts and offered consumers the choice of play-ing lottery games through the telecom-munication medium we know as the Internet. The time is right and the public is ready for it. Let’s see what happens. GMI

Alex Igelman, LL.B is Counsel to Good-

man and Carr LLP in Toronto and practices

exclusively Gaming and Entertainment

Law, and in 1992, as a sole practitioner, he

pioneered the enforcement and collection

of gambling debts in Ontario. he would like

to thank Joseph Kelly for his assistance in

preparation of this article

Market InsIght:

keeping up with the Joneses a case for Internet gambling in ontario By: ALEx IGELMAN


Page �

Fallout from the ratification of the unlawful In-

ternet Gambling Enforcement

Act (uIGEA) in the us – as well

as several high-profile arrests

under the new law – has sent a

chill through payment process-

ing businesses serving Internet

casinos, betting shops and other

such enterprises.

Indeed, with the arrest of the two Ca-nadian founders of Isle of Man-based payment processor NETeller Plc, com-panies here have been distancing them-selves from the online gaming industry with considerable speed. NETeller also recently announced it was cutting 220 jobs at its Calgary office as a direct re-sult of exiting the us market. The act – which requires management at pay-ment processing firms of nearly every description to block us-based trans-actions to e-gaming sites or face five years’ imprisonment and a fine – was made law on October 13 last year after us President George w. Bush signed it. however, it has a 270-day window before it comes into effect and can be fully implemented.

Mark Bains, CFO of Burnaby BC-based EsI Entertainment systems Inc., says that lag means there’s still some uncer-tainty as to how its provisions might be interpreted by the courts, but adds, “we couldn’t wait any longer and had to move our business. we’re kind of steering clear of e-gaming at this point in time, until the rules and regulations are figured out.”

In a release dated January 17, EsI said that it had been “looking forward to complying with the new regulations for financial processors under the un-lawful Internet Gambling Enforcement Act,” but the NETeller arrests forced the company to take the safe option and simply shut down all gaming-related

Internet offers many markets, opportunities: payment firms By JAMEs LEwIs

Page �


business altogether. The release also warned that since so much of EsI’s rev-enue came from Internet gaming sites outside of Canada, “this decision will have a material impact on the financial condition of the company.” Bains says the e-gaming portion of the company’s business was the fastest-growing.

That move doesn’t mean EsI’s Citadel Commerce payment processing unit is being wound down, however – applica-tions for such a service abound in for-eign markets, according to Bains. “we’re expanding into Europe, and we’re actu-ally getting into other…non-gaming verticals,” he says. On January 23, the company announced it will now offer payment and money transfer services to merchants in spain, the united King-dom, sweden, France, and Germany.

And the demise of its e-gaming ser-vice business doesn’t mean it’s out of the wagering, gambling and betting vertical altogether. The company also has two other divisions, EsI Integrity Inc. and PlayLine Inc., which cater to various facets of gaming. The former services “state lotteries and govern-ments, where the industry is regulated,” Bains says, while PlayLine “only deals with land-based casinos where they’re regulated in that state or country or whatever it happens to be.”

uIGEA’s timeline was especially bad for Calgary-based Okalla Corp.: on February 28 last year, it acquired Pro-billing Inc., an Alberta-based payment processing firm, and made it the main-stay of its operations. The company was still trying to turn a profit on the acquisition when the act was passed late last year.

since June 1, 2006, Okalla had also been pursuing web Transaction services (wTs), an Austin Tx-based processor of online debit card and chequing payments. On October 17, however, the $11-million acquisition was formally cancelled. The move was more one of pre-emptive prudence than a rush to comply with uIGEA;

even though wTs didn’t have direct exposure to gaming, it was involved in processing “other high-risk trans-actions,” says Clyde Beattie, Okalla’s chairman and CEO. In light of the new environment, he adds, “we are just sort of digesting what the situation is in the industry and assessing what opportunities might be open for us.”

Although there have been challenges to the us law from various quarters – in-cluding recent threats of a world Trade Organization complaint by European union internal markets commissioner Charlie McCreevy, who said the regu-lations were protectionist and against trade agreements between the us and the Eu – any attempt to overturn uIGEA will likely yield little fruit. “Even if the Eu was to commence some kind of ob-jection with the wTO, that’s a long slow process,” Beattie says. “I don’t know if I’d live long enough to see the result of it and, if I did, it wouldn’t probably have much impact anyway.”

Regardless of the grim picture at present for great chunks of their busi-nesses, both men say online payment processing and e-commerce will pres-ent future opportunities they hope to tap into. “I guess over the next 10 to 15 years we’ll figure out…all those things,” Bains says. “The Internet’s not going to go away.” GMI

Page 10

Tell donna dagg, sustainability co-ordinator at

Manitoba Lotteries Corp. (MLC),

that her organization is ahead of

the curve because it has made

a conscious effort to recycle

its electronic equipment since

2005, and she’ll suggest you’re

off your rocker. As far as dagg

is concerned, MLC is new to

e-waste management.

“I think it’s late,” she says to the sugges-tion that MLC was an early e-waste recy-cler. But the truth is, the organization is ahead of its own province’s mandates. Manitoba doesn’t have a province-wide electronics recycling program, unlike saskatchewan and Alberta where resi-dents pay an extra fee when they buy computers, TVs and printers that funds provincial e-waste recycling programs.

Manitoba is working on a similar prod-uct stewardship program, but mean-while green-keen organizations must devise their own e-waste management systems. MLC sends its lottery termi-nals, slot machines, video surveillance equipment, and office computers – gear for its Club Regent Casino and the McPhillips street station Casino – east to a Noranda Recycling Inc. electronics recycling plant in Brampton ON.

“we know we have CO2 emissions with [a shipment of that distance], but we evaluated the environmental impacts associated with the electronics and made a decision that this is what we would do,” dagg says.

manitoba lotteries corp.puts enviro spin on slots By: sTEFAN duBOwsKI

Page 11


But it’s not as if MLC is working entirely on its own. Although Manitoba lacks a provincial e-waste recycling system, the government insists that its agencies act responsibly, dagg says. “All govern-ment organizations, crown corporations such as ourselves, hospital authorities, school divisions et cetera – we’re all asked to abide by the sustainable de-velopment Act, which doesn’t say what you need to do from an environmental and social perspective, but asks you to consider things. waste management is one of them.”

But waste management can be ex-pensive. In dagg’s estimation MLC spends $7,000 to $10,000 per load to Noranda. The number of loads per year varies. still, it’s worth the cost overall, especially beside the alternative. MLC used to send its exhausted electronics to a local metal recycling facility, which wasn’t equipped to safely handle the hazardous materials in circuit boards and video screens, which can include mercury, cadmium, hexavalent chromi-um and lead. “That should be smeltered out,” says dagg. “It doesn’t belong in a landfill and it doesn’t belong in a metal recycling plant either.”

while MLC has its electronics exit strat-egy locked down, the organization is also changing its procurement processes to facilitate responsible equipment man-agement. For instance, it’s eyeing the Eu-ropean union’s Restriction of hazardous substances (Rohs) law as something that manufacturers selling equipment here in Canada should abide.

updated technology benefits the envi-ronment as well. says dagg: “It used to be that you had to pull the whole ma-chine out. Now it’s a matter of changing

the cards in them and the faceplates on them. Because we’re starting to ask more and more in our procurement documents for alternatives to remov-ing the entire machine, and because all gaming institutions throughout the world are responsible for the disposal of these items, it’s becoming more and more green.”

dagg advises organizations developing e-waste programs to consider costs at the beginning of the procurement pro-cess, even though the money might not be spent until the electronics’ end of life. “There’s more of a push from a purchas-ing perspective to buy things that are less environmentally significant, and they’re aware of their impacts on the en-vironment. If organizations dealt with it that way, it wouldn’t seem such a huge burden at the end.” GMI

manitoba lotteries corp.puts enviro spin on slots By: sTEFAN duBOwsKI


Page 12

It’s been more than four

months since the OLG’s security

procedures were brought into

question when the CBC’s Fifth

Estate revealed an OLG retailer

in Coboconk ON had stolen a

winning ticket from an unknow-

ing customer. since that time

two facts have become apparent

about the OLG: it has increased

its security measures regarding

retailer wins, addressing what

may not have been an isolated

incident; and it is currently oper-

ating under increased public and

media scrutiny.

Case in point: in November three Fenel-on Falls ON residents, two of whom are OLG retailers, won $1 million on an In-stant Millions scratch-and-win ticket and were subjected to a 45-day investigation by the OLG before they received their prize money. A week after their payout, the winners’ expressed their anger in the national media over having to wait so long.

“It’s really a no-win situation [for the OLG] in some respects,” says Lyle hall, managing director of the leisure and gaming consulting firm hLT Advisory Inc. “Fair media scrutiny is fine, [but] I think there’s sometimes a tendency to look for things that aren’t really there.”

Indeed, it’s hard to imagine the national press showing much interest in a story like this five months ago. Teresa Roncon,

spokesperson for the OLG, says it’s not unusual for retailer win investigations to last 45 days or longer. And for clarity, she adds that contrary to what the media outlets reported, the Ontario Provincial Police were never involved in the Fe-nelon Falls investigation. however, that the Fenelon Falls situation followed so closely the Fifth Estate report on the Co-boconk situation – and that Fenelon Falls is near Coboconk – made it a story that the media simply wouldn’t pass up.

“Because things are in the media all the time it’s just more top-of-mind for peo-ple,” says Roncon. “Maybe [the winners] just got concerned that they weren’t go-ing to get the money, but there was no indication that they weren’t….we just did our job investigating the win.” while lottery retailers were already subject to more stringent win policies than average consumers, they should expect an even more thorough investigation process from now on.

As part of the seven-Point Action Plan it implemented in November, the OLG lowered the threshold for detailed in-vestigations of retailer prize claims from $50,000 to $10,000, and has contracted an investigation company made up of more than 25 retired police officers to assist with retailer win investigations and other complaints. Other measures – such as customer-facing lottery screen improvements, self-serve ticket check-ers, a new customer input phone line and email address, and an awareness campaign reinforcing the importance of customers signing the back of their lottery tickets – are aimed at the public. Given that it would be impossible for the OLG to police its massive network

of more than 140,000 lottery retailers in Ontario, it’s prudent to place some of the onus for ticket security on custom-ers themselves.

“[with] the sheer volume of transac-tions this organization handles in a year, it’s not surprising that from time to time there may be a problem or two,” says hall, referring to the OLG’s approxi-mately 700 million annual transactions. “I think what they’ve done is react re-sponsibly to public perception as much as anything else…[and] provide even more structure and oversight around a process that already had a great deal of structure and oversight.”

Roncon says that over a year ago the OLG installed a few hundred self-service ticket checkers in lottery terminal loca-tions but, as part of the new seven-Point plan, that number will be increased to include all of the more than 9,000 lot-tery terminal locations by this spring. so while there’s no disputing that the Fifth Estate’s report was a black eye for the OLG, the fallout from it should only benefit Canadian lottery players.

“we have heard our customers, listened to what their concerns were and put in place a plan to address their concerns,” says Roncon. “Perhaps what the media attention has done is focus our company on an issue that is ultimately going to make us better.” GMI

customers and retailers are part of the olG’s new security procedures

FoR moRe INFoRmaTIoN oN ThIs

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Date post:	20-Jun-2015
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Keeping Up With The Joneses

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